Bitterfeld-Wolfen, 13 August 2008 - Q-Cells AG (QCE; ISIN DE0005558662) has presented its report as of 30 June 2008. Production rose by 65% to 263.5 Megawatt peak (MWp) in the first six months of 2008 (first half-year 2007: 159.8 MWp). During the second quarter of 2008, therefore, the company achieved 25% growth with a production volume of 146.5 MWp compared with the previous quarter.
Sales in the first six months also increased by 65% to € 579.5 million (first half-year 2007: € 350.4 million). This corresponds to a sales increase of 15% in the second quarter compared with the first quarter of 2008. In addition to the sales increase, Q-Cells also posted an increase in stocks of € 17.4 million (first quarter: decrease in stocks of € 5.2 million), which impacted on the company’s operating income. This increased stock was associated with ongoing projects of the Q-Cells International GmbH subsidiary established last year which are to be realised by the end of the year.
Without taking into account the start-up costs for the new technologies, Q-Cells AG generated earnings before interest and taxes (EBIT) amounting to € 129.9 million in the first six months. Adjusted for these start-up costs, which increased in the second quarter, Group EBIT amounted to € 119.1 million (increase of 47% in comparison to first half of 2007). EBIT in the second quarter thus amounted to € 66.1 million in the core business and € 60.2 million for the Group taking the start-up costs into consideration. Adjusted for the effects of the change in stock (the stocks are valued as low direct costs), EBIT in the core business in the second quarter amounted to approximately € 73 million and € 67 million for the total enterprise respectively. The adjusted EBIT margin for the core business in each of the first two quarters of 2008 was therefore around 23%, for the group in both quarters approximately 21%.
Net income for the first half-year (after minorities) was € 74.7 million without taking into consideration the effects of the investment in REC Renewable Energy Corporation ASA (first half-year 2007: € 47.6 million). This corresponds to an increase of 57% over the same period of the previous year. As a result of the termination of the put options agreement with Orkla ASA, as already reported with the Q1 figures, an amount of € 18.1 million was written down in the second quarter for the put options regarding the REC shares. This results in a negative income contribution of € 2 million for the first half-year (following the write-up amounting to € 16.1 million in the first quarter). Including the prorata REC net income (€ 9.4 million) and the mentioned depreciation, the net income for the first halfyear amounted to € 82.1 million (previous year: € 77.3 million).
Despite a lower share of sales to Spain in the second quarter, Q-Cells further increased the export ratio in the first half of 2008 in comparison with both the same period of the previous year (57.6%) and the first quarter (69.2%) to 70.3%. The company achieved the highest growth rates compared with the previous quarter in India and North America.
Further expansion in core business and thin-film technologies
Following the conclusion of the supply agreement with the Canadian Bécancour Silicon Inc. (BSI) to continue supplying 6,000 tonnes of solar silicon per year from 2010 to 2013, the production plant in Malaysia is to be expanded to a total production capacity of 520 MWp by the end of 2009. At the Bitterfeld-Wolfen location, a production capacity of 800 MWp is to be achieved by mid-2009. Q-Cells will then have a production capacity of 1,320 MWp in the core business by the end of 2009.
Solibro, in which the company holds a 67.5% stake, and which began production of the first test modules on the basis of a CIGS thin-film technology at the Bitterfeld-Wolfen location in mid-April, will expand its production capacities substantially. In 2009, Solibro is to increase the capacity at Bitterfeld-Wolfen from 30 MWp to 45 MWp. Solibro will also construct a second production line with a production capacity of 90 MWp. Construction is scheduled to begin at the end of 2008. The ramp-up phase will begin in the fourth quarter of 2009.
By the end of 2008, our wholly-owned subsidiary Sontor will have concluded the production ramp-up with a capacity of 25 MWp at the Bitterfeld-Wolfen location. Due to the positive results of pilot production, the next stage of expansion with a production capacity of 120 MWp will be twice as large as originally planned. Construction is also expected to begin in the fourth quarter of 2008. Start of production is scheduled for the fourth quarter of 2009 and full production capacity is expected to be achieved by mid-2010.
Outlook for the whole year and the following years
On the basis of the raw material volumes secured for the ongoing year, Q-Cells AG now expects to achieve a production volume of 585 MWp in the core business in 2008 (previously 570 MWp). With regard to the new technologies, a total production volume in all thin-film subsidiaries of between 10 MWp and 20 MWp is expected for 2008 (previously between 25 and 50 MWp) due to the delayed production start-up, particularly at Calyxo GmbH. Thanks to the overall positive development, the Group is raising its sales forecast for the current year to approximately € 1.325 billion (previously € 1.275 billion). With an EBIT margin which continues to be approximately 20%, Q-Cells AG expects operating income of approximately € 260 million (previously € 252 million). Without the REC income taken into consideration, the company aims to achieve an annual result of approximately € 177 million. Including the pro-rata income from REC, net income for the year should amount to be approximately € 200 million.
Q-Cells AG aims to generate a production volume of more than 1 GWp throughout the Group in 2009. This corresponds to approximately 70% growth over 2008. The sales forecast for 2009 will also be substantially increased to approximately € 2.25 billion (previously > € 2 billion).
The company expects an again accelerated growth in 2010 compared with the year 2009. Q-Cells aims to achieve a total production volume of approximately 2.5 GWp. More than 2 GWp (previously >1.5 GWp) of this relates to the core business. The production target for all subsidiaries in the area of thin-film technologies is in excess of 400 MWp.
Q-Cells and SunEdison jointly address the North American photovoltaic market for large scale solar projects
Q-Cells International USA Corp., a California-based 100% subsidiary of Q-Cells International GmbH and Sun Edison LLC, North America’s largest solar energy services provider, have agreed to jointly develop large-scale photovoltaic systems and financial solutions for the North American market. Therefore, Q-Cells International USA and SunEdison have signed an agreement to jointly develop, construct, own and operate solar power projects in the United States. The agreement relates to Q-Cells International supplying solar modules with a total performance up to 800 MWp over a period from the end of 2008 to 2013.
The six-month report and a current company presentation can be downloaded from the Investor Relations section of the Q-Cells AG’s website (www.q-cells.com).